Microsoft made an offer to buy Yahoo! for $31 a share or $44.6 billion today. The deal (should it go through) is expected to help Microsoft corner a larger share of the online advertisement space and enable it to take on online rival Google. The proposal comes at a time when Yahoo! posted a sharp drop in fourth quarter profits as well as at a time when it’s stock is trading near it’s all time low since October 2003. This makes Yahoo! an attractive acquisition target for Microsoft which is seeking ways to increase its market share and take on Google, the current market leader with a 56.3% market share.
Should the deal through, I guess this will be one of the largest online consolidations, somewhat along the lines of the AOL-Time Warner merger. This should also change the online services space quite drastically. It will then remain to be seen if Yahoo’s popular services continue to co-exist alongside those of Microsoft or whether some of them are retired ( Like in the case of Yahoo! Photos in favor of Flickr ) to capitalize on mutual synergies.
Irrespective of whether the deal goes through or not, I guess the kid gloves are off in the oncoming Microsoft and Google duel for online supremacy.
Sachin Ramnani says:
It sure seems to be a sweetly timed offer. Microsoft bid for Yahoo last year but was rebuffed by its board. Now, Microsoft has struck while the iron is hot with Yahoo reporting below par results for the latest quarter, they have offered Yahoo a price that represents almost a 62% premium over its closing price of around $19.00
Its an offer that I think Yahoo shareholders would find hard to resist!
February 1, 2008, 3:28 pm